The practice of cyber squatting has been an issue for brands since the early days of domain registration when the “Internic” provisioned domains. For the first seven or eight years during the web and domain registration boom, names were “held” (a.k.a., squatted) by infringers who were just waiting for an offer from the trademark holder to buy the domain name. Today, the methods used to monetize trademarked domains are very sophisticated and continually refined to enable domain name pirates and their supporting “ecosystem” to generate the maximum revenue on misdirected web traffic.

In the early 2000’s, displaying pay-per-click advertising (PPC) sites, also known as traffic monetization sites, was one of the first alternatives to “squatting” on a name. Pay-per-click ad sites offered cybersquatters and typosquatters an easy and immediate way to offset domain registration costs. Then, when the money started rolling in, the cyber criminals realized they could amass significant wealth with little or no effort. And, there was really no risk to deter them from registering trademarked domains. There are now hundreds of traffic monetization companies that domain pirates can use and the sites that display on their syndicated ad networks have become very robust. These cyber pirates, and the complex systems they’ve built, do not appear to be going away anytime soon, as the demand to find better and smarter forms of turning views on the web into dollars is increasing year-over-year.

While a web visitor may know that that they did not arrive on the intended web site of a particular brand, do they really re-type the domain name into the browser or do they just click on a link that looks like it will get them where they want to go? The ads pages are often very enticing and most users will try the one-click route to get to their desired destination, which means they’re not re-typing the domain into the browser and you’re potentially either losing a customer or paying more for one than you are aware. If you’re the person searching and you see a 50% discount on the product or service that you want, but it’s from a different brand, do you at least take a look at the ‘alternate’ offer? Research suggests that most people do. The sites deliver ads that can be very brand specific (ads of the brand holder, competitors and related industries) and they can serve geo targeted ads based on the visitor’s IP address to make the ad content extremely relevant and enticing. One of the newer forms of web site monetization is to build “developed sites” in a variety of vertical markets that appear to be authentic sites and include relevant content that is surrounded or imbedded with ads. The infringing domains are carefully pointed to the site of your vertical market with your SEM ads and the ads of your competitors.

So how is this practice of domain name piracy harmful to your brand? Let’s look at the DirectTV example. The domain name dirrectv.com, which is a pretty good typo of the real site www.directtv.com, currently resolves to a pay per click ad page. You have to wonder how much web traffic DirecTV is losing each time a user mistypes their domain after watching a DirecTV™ commercial? In the best case scenario, DirecTV is paying $0.50, $1.00 or even more for a customer who already wanted to visit their site at no cost. In the worst case scenario, the consumer intending to go to the site ends up on the parked page, clicks the ad for Dish Network™ and orders a subscription there instead. An immediate lost sale, but what is the lifetime value of each lost opportunity?

Ironically, the companies footing the bill to make these domain name pirates wealthy are the very companies that are being hurt by this practice—it may be happening to you. Protecting your brands IS the same thing as protecting your revenue.

To learn more about how your company can develop an online brand enforcement strategy and stop the loss of revenue at the hands of domain name pirates, you can contact us at Safenames US, +1.703.574.5313 and nasales@safenames.net, or the Safenames UK at +44 1908 200022 and emeasales@safenames.net.

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on Thursday, April 14th, 2011 at 5:26 pm and is filed under Uncategorized.
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